How Dell Changed Its Online Reputation

The September 15 issue of Fortune magazine has an interesting piece on Dell Computers use of Web 2.0.

When Michael Dell returned to Dell as the CEO in 2007 profits were down 27%. In the early days Dell had a reputation for good service—at this point they were constantly berated in blogs and online forums for lousy service.

Now Dell monitors its online reputation constantly and when someone mentions them online, they are likely to know about it within an hour. But, they don’t stop their. Dell listens to the conversation and often becomes an active part of it—they want people to know they care.

To do this they have to do more than talk. Dell makes a deliberate effort to listen to customer complaints and take appropriate actions. They go one step further and invite the marketplace to tell them what is important on a site called IdeaStorm. Thousands of people did and Dell incorporated many of the ideas into their new Latitude laptops.

When they looked at what customers do online, they found that 99% of their time is doing research, try to make informed decisions. This insight led Dell to tune down the hard sell and increase their efforts to be helpful.

Does this make any difference? Well, before taking this proactive customer-centric approach Dell had slid in the University of Michigan’s customer satisfaction survey. Now they are back on top. When they start monitoring online comments about Dell, 48% of them were negative. Now the number is down to 23%. And, profits are on the rise.

What the take-away? Companies need to no only monitor their online reputations, they need to use social media to engage customers.